8/10/2007

WARSAW (Thomson Financial) - Computer-services company Asseco Poland could raise its net profit above 115 mln zlotys this year after its second-half earnings came in almost five times higher than a year earlier, the company's chief executive said.

'Results of the first half make us confident that exceeding the analysts' forecast of 115 mln zlotys in net profit this year is realistic,' Adam Goral told Thomson Financial News on the sideline of a news conference.

The company's chief financial officer Piotr Jelenski said Asseco, which has gone on a buying spree in eastern Europe in the past quarters, could spend 200 mln zlotys on foreign acquisitions in the second half of 2007.

Asseco is looking at potential targets in the Balkans, Romania and Lithuania, he said. The company could also float three companies from the group, Asseco Business Solutions, Asseco Systems and Asseco Czech Republic on the stock exchange, Jelenski added.

Moody's said the change in outlook reflects the bank's strong organic growth in all business segments, but especially in corporate banking and mutual funds, where the bank is the second largest player Poland.

The ongoing improvement in the bank's financial fundamentals, especially in profitability and cost efficiency indicators and the conservative risk profile of the bank are also major factors influencing the change of outlook, the ratings agency said.

However, the bank's global local currency 'A1/P-1' and foreign currency 'A2/P-1' deposit ratings remain unchanged, underpinned by the ownership of Allied Irish Banks and the agency's assessment of high probability of systemic support to the bank, Moody's added.

Poland wants to set a new deadline for the construction of their Euro 2012 stadiums, Sports Minister Elzbieta Jakubiak said on Monday.

Since Poland won the right in April to co-host the event with Ukraine, early euphoria has been replaced by growing concerns it may not prepare new grounds and upgrade inadequate infrastructure in time.

European soccer's governing body UEFA says the tournament co-hosts must build the necessary stadiums by mid-2010.

"We need additional time and the year 2011 will be the most suitable," Jakubiak told a news conference.

The surprising choice of Poland and Ukraine as co-hosts ahead of Italy was originally touted by the Polish government as an opportunity to put the country on the international soccer map.

But a growing number of critics say Poland might have taken on a near-impossible task.

"Beside the announcement, nothing has been done so far," said Zbigniew Chlebowski, deputy head of the parliamentary finance committee and a member of the opposition Civic Platform party.

"There are also no ideas where to get the money from to finance the huge projects."

Poland is estimated to need about three billion zlotys ($1.09 billion) to build or restructure four main Euro 2012 stadiums.

WARSAW HEADACHE

The planned national stadium in the capital Warsaw has proved the biggest headache.

The new ground is to be built at a dilapidated communist-era stadium now being used as Europe's largest outdoor market, with Jakubiak saying hundreds of traders will be asked to leave by mid-September.

Polish authorities have not decided whether the old stadium will be razed or if a new facility will be built next to the old one to save time.

The transport ministry also estimates it will need 164 billion zlotys to build 2,400-km (1,500-miles) of motorway to prepare for the tournament.

Only six kilometres of motorway was built last year and none so far this year.

Jarro Kaplan, president of Goodyear Tire and Rubber Company’s Eastern Europe, Middle East and Africa unit, said that strong ties with Turkey won’t stop the company from making major investments elsewhere in the region.

“We have been in Turkey since 1927. We have modernised our factory in Izmit. We have very strong ties with Turkey. However, labour in Poland is approximately 1/3 of the cost of labour in Turkey. For this reason, our most recent investment of 100 million USD has been made in Poland,” Kaplan said.

Easyjet, one of Britain’s biggest cheap airlines, has announced that it will be serving more Polish airports in the coming months.

More from John Beauchamp:

The expansion is a continuation of what the industry has seen over the past few years in the country, and it doesn't seem to be stopping soon. Is the market becoming oversaturated though?

The airline has already opened routes to Kraków this year from Newcastle and Belfast, and October this year sees new routes from London's Gatwick airport to Gdańsk and Kraków. Edinburgh and Bournemouth will also start flights to Kraków towards the end of October, just in time for the All Saints holiday in Poland at the beginning of November.

But why the expansion? I spoke to Samantha Day, a spokeswoman for Easyjet at their headquarters in Luton.

"Poland is very much an emerging market for Easyjet, we've been growing at a rate of around 36% year on year since we began operations in 2004. We see that there's strong potential for further growth in the future as well, so we expect to carry over 1 million passengers on our Polish routes in the coming year."

The importance of cheap flights to Polish cities is a boon for business and the populations of both countries, with Brits taking advantage of Poland as a tourist destination and Poles using the flights to shuttle themselves to work. Samantha Day once more:

Because Poland has such a huge population and because Poland is such an attractive destination for British travellers, then low-cost flights not only mean a boost to tourism, but it also means that there are stronger business links as well as a perfect service for economic workers, for Polish people that are working abroad who want to either go home to visit their families, or for families to depart Poland and visit their loved ones when they're working abroad."

Cheap flights to Poland are becoming big business, but does Poland really benefit from them? I spoke to Andrew Kurethof the Warsaw Business Journal.

"I think Poland does benefit the cheap airlines coming in. The more cheap airlines there are the more competition there is, and that means pressure on prices, and as we know price is king in Poland, and better prices means more people can travel."

Whilst there is growing demand for flights, there doesn't seem to be any worry that the market will become over-inundated with cheap flights from abroad. Not yet, at any rate:

"I don't think there are too many of them, and I think that once there are too many, then the market will take care of it. If there's too many airlines, then some airlines won't be able to make it in the market, and they'll fail, and the best airlines will come out on top."

Cheap flights can only mean a good thing, yet there is growing concern that Poland's airport infrastructure is not able to handle the huge amounts of passenger traffic that lands in Poland's airports every year. Problems with Warsaw Okęcie's Terminal 2 are known by every air traveller flying to and from the capital's airport, and Poland's smaller regional airports are bursting at the seams.

Andrew Kureth, however, shows the pluses and minuses of the infrastructure in it's present state.

"No it's not adequate enough to handle such huge passenger traffic, and although most airports are expanding at the moment, it's probably not enough, they'll need to expand. But it's a good problem to have because I'd rather people were moving, and business was getting done, rather thannobody travelling at all."

Poland has a lot of work to do to prepare it's airports in the coming years. With passenger traffic rising rapidly year on year, and Euro 2012 only 5 years away, not only Poland's airports, but it's entire transport infrastructure will have to undergo a huge overhaul. For the moment though, people just want to fly, and not have to pay through the nose for it.

8/05/2007

Italy's Unicredito Italiano SpA has agreed today to sell a 66 pct stake in Poland's third biggest bank, BPH, to General Electric unit GE Money for 625.5 mln eur, the group said.

Analysts had expected UniCredit to get 1.0-1.5 bln eur from the deal, which still needs approval from Polish regulators.

The sale opens the way for UniCredit, which also owns Poland's number two lender Pekao, to merge its two local units by year's end.

The Italian group had promised Poland's conservative government it would sell the BPH brand, 200 out of 485 of its branches, and other assets as a condition for completing the BPH's tie-up with Pekao, which would create Poland's largest bank by assets.

'I have always said BPH is a good platform to enter the dynamic Polish banking market,' Luigi Lovaglio, Pekao's deputy chief executive in charge of the Polish units' merger, said on the sidelines of a news conference in Warsaw.

The GE acquisition includes BPH mutual fund unit, which at the end of 2006 had 1.8 bln eur of assets under management.

Based on end-2006 pro forma data, New BPH had total assets of 2.2 bln eur and net credits of 1.4 bln.

The transaction will be completed by end-2007 following the registration of the spin-off of part of the Bank BPH business into Bank Pekao, expected by October, according to slides presented to analysts.

Explaining the transaction, Unicredito CEO Alessandro Profumo noted that the stake sold, or 200 branches, had a net profit of 7 mln eur against the 324 mln eur net profit of the 285 branches that Unicredito kept.

Profumo also said the part sold had a cost/income ratio of 86.0 pct against 35.3 pct for the branches the Italian bank kept.

Total assets in the part of BPH bank that will be spun-off into Pekao totaled 14.7 bln eur at the end of 2006.

Becton Dickinson and Co said on Friday it has recalled a single lot of about 400,000 syringes from Poland after receiving several complaints from hospitals there that some of its syringes were contaminated.

The problem in the syringe, known as the BD Discardit, arose in the manufacturing process at a facility near Barcelona, Spain, a spokeswoman for the Franklin Lakes, New Jersey-based company said.

The spokeswoman said she did not know how many syringes were affected and what the nature of the contamination was, but said there were no reports of adverse events related to the syringes.

"We're doing a full and complete investigation," including testing of the foreign matter found, company spokeswoman Colleen White said. "We believe the actual number of syringes affected is very limited."

White said the company has suspended shipments from the Spain facility.

Syringes from the facility are shipped to Europe, the Middle East and Africa, White said, and the company was planning to recall other lots beyond the one shipped to Poland.

"We believe we've identified and isolated the source of the problem and we're in the process of taking corrective action," White said.

Becton Dickinson shares closed down $2.28, or 2.9 percent, at $76.20 on the New York Stock Exchange.

According to PAP information, the prices for agricultural lands rapidly increased past year in Poland. The price growth goes on this year, however, the rates have somewhat slowed down. The average price for 1 ha of agricultural land was around $ 3,200 in the first half of 2007.

Lublin county (bordering to Ukraine) has the cheapest agricultural land; one can buy land for in average $ 2,400/ha there. The most expensive land is located in the central regions of Poland; the prices average to 4,700/ha there. It is interesting to mention that in the first half of 2007 the significant price growth was observed at the sales of small land plots up to 10 ha. These sales allocated the most part of transactions on land market. At the same time, the prices for land plots of more than 10 ha somewhat declined in the first half of 2007.

The rates of land rent grow simultaneously with the price growth for land. The growth of rent rates exceeds the growth of prices for land now. The rent rates depend a lot on the prices for grain and other agricultural products. In average, this year the annual rent of 1 ha of agricultural land in Poland amounted to $ 139.

According to estimations done by Andriy Yarmak, the Manager of ""Agrooglyad: Vegetables and Fruits", the price growth for land and the growth of rent rates will have the greatest impact for the growers of grain and oil crops in Poland, as the production cost will grow too. At the same time, fruit&vegetable growers will hardly perceive the impact of this price increase, as they get dozen times as much produce per one hectare. According to the expert's evaluations, next year the land will cost significantly less in Ukraine than in Poland (unless the moratorium for agricultural land sale is extended).